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INTERVIEW

"Americas continues to be a big focus market for us"
Monday, 08 October, 2018, 08 : 00 AM [IST]
Just Organik, a brand signifying just and ethical supplies of organic produce, is owned by Treta Agro (P) Ltd, an agriculture produce oriented group with prime working area in Uttarakhand and corporate office in New Delhi. The goal of this venture is to make safe and healthy (organic) food accessible and affordable to the consumer and create sustainable wealth for the farmers by motivating them to adopt organic farming practices. Certified as per India Organic, USDA and EU organic standards, the company has been recognised by DIPP, Government of India under the Startup India initiative. In an email interaction with Harcha Bhaskar, Pankaj Agarwal, co-founder & MD, Just Organik, spoke about organic food market in India. Excerpts:

How different is organic food from regular food products? Do you think that mass consumer will compromise on taste and money to adopt this trend?
Organic food is grown without the use of chemicals and sludge-based fertilisers and pesticides, complying with natural farming methods to promote ecological balance and conserve biodiversity. Throughout the entire process of growing, storage, transportation and service of organic foods, zero exposure to chemicals and preservatives is ensured, unlike the conventional food production. Organic food is not adulterated and is not genetically modified that results in high nutritional value and pure health.

The younger generation doesn’t know the real taste as they never got the chance to eat chemical-free food hence they associate organic food with a different taste. However the elderly associate it with a taste of earlier days. Hence it is not a compromise but a treat to taste buds to have organic food.

Although Indian market is price-driven, we do not find price and taste to be the dominant constraints on the growth of organic food produce market. Lack of knowledge and awareness about organic produce benefits amidst consumers is one of the biggest obstacles for the industry to grow. Either the consumers think of organic food as a fancy choice, or not ready to trust the brand and added benefits. The recent announcement of the Food Safety and Standards Authority of India (FSSAI) states that any product that hasn’t been certified and does not carry a label on its organic status, can’t be sold, will help build the trust factor among the consumers. It might take some time but with proper health awareness, organic produce will reach the mass consumers, soon.

What are the various products in your portfolio, which one of it is in demand?
We have an entire range of organic products available for consumers and try to cover all the dry grocery items present in an Indian kitchen. We won the “Best Organic Product Range” award by Assocham, recently because of the same reason. Along with everyday use grocery we are also focussing the new trend and have a complete range of millets and many other healthy grains e.g., Quinoa, Buckwheat, Red Rice. This ensures that all strata of the consumers will be able to find their choice under our brand. The wide gamut of organic produce ranges from pulses, lentils, cereals, nutri-cereals, spices, herbs, oils, tea, sweeteners, and dry fruits.

Is your company into contract manufacturing? If yes, in which region and what product?
The company has three verticals and private label is one of the vertices where we are doing the private label for certified organic products for some of the leading retailers under their brand name in India as well as internationally.

We get our products directly from farmer groups that we directly or indirectly manage and support. For some of the products that are less in volume, we get it from other aggregators.

How many employees are associated with the company from farm to market?
The company has engaged NGOs working in the fields to operationalise and manage at the farm level. While the quality inputs and other documentary support is provided by us, the leg work is done by these NGOs. This helps us immensely by reducing our operation cost significantly, at the same time getting more efficient and better quality output because most of the NGOs workers are now part of the community itself.

The processing, packaging and other activities are completely in house. As a Startup India recognised company, we have tried to generate new employment by giving a chance to the first time employees. 90% of our employees are 1st time employees. Women empowerment is another goal that we have achieved. The complete processing and packaging is handled by women and they are really efficient at that.

Which are the countries you export to and what products?
We are exporting to USA, the UK, France, Australia, Singapore, the UAE and Oman. Europe and the Middle-East is the focus area for us to expand in the short-term basis. Currently, cereals, millets and tea are the main focus for European market while pulses and spices are the focus for the Middle-East market. In the longer run we are coming out with some very innovative health food, specifically targeting the Western consumers.

Those products will help us expanding in the US and Canadian markets.

What are your new launches and expansion/acquisition plans?
We are currently covering the dry grocery basket of an Indian household. New product launch is to target the health-conscious and on-the-go corporate consumers. These products are very innovative and will provide convenience with health.

From the geography perspective, on the domestic side, we are covering more and more modern trade and online stores. We are already available at Spencer’s, More, Modern Bazar, Amazon, Flipkart and many more apart from a wide count of general trade stores.

Our goods are available both online and offline, and getting popular by every coming day among the organic admirers. For mass outreach and better connectivity, we have also tied up with big retail brands and online grocery stores such as Foodhall, Spencer's, bigbasket, Grofers, and Amazon, to cater to the organic produce requirements for their customers.

On the international front, we have tied up with the largest chain in the Middle-East to promote our products. This will give us access to the entire population of the UAE. Americas continues to be a big focus market for us and we plan to soon appoint distributors to take the products forward.

Which are the institutions you supply products to?
Among the three vertices that we discussed, institutional has long-term promise. We are already supplying to many leading hospitals, five-star hotels, best of the colleges and schools. As the awareness around the organic increase, more and more institutes are sending enquiries. We have come up with special packing to suit institutional requirements.

What are the certificates needed to be a certified organic food product manufacturer and exporter?
India Organic, USDA and EU organic standards are the major certificates that an organic food product needs to adopt before entering that market. India has come up with its regulation called Jaivik Bharat. Hence one needs to be certified as per either India Organic standards or PGS standards. While India Organic standards are accepted in other countries as the basis of the certification for their country, PGS doesn’t have any takes in the international market. From the Indian consumer’s perspective they generally look for USDA certification. Among all, EU norms are most stringent.

What are your marketing plans to pull consumers towards organic food category?
Pulling consumers towards the organic is the most important task. If more consumers asking for organic products, it will help all the brands and not only a single brand. It will ultimately also result in price correction and further increase the opportunity available. To achieve this there is two-pronged approach.

One we are working as an industry and with government organisations to increase the awareness level of the consumers. As a brand we are at an advantageous position to have many of the modern trade stores with us. We are using all the possible opportunities and the display areas to make sure that rather than just the brand promotion, category promotion is encouraged. We put the displays on why organic etc. We are also running online campaign to make people aware about the harmful effect of non-organic food and how it affects their and their loved ones’ health. We are also working on direct consumer connect programme to make it a point that buy any brand but buy organic.

How much is India’s organic food market worth? Out of it how much is the domestic consumption and how much is exported?

Currently, the Indian organic food market is hovering around Rs 2,600 crore and awaiting new governmental action plan to get the boost. The major part of India’s organic produce is exported to developed nations including USA, the EU and Canada. The domestic consumption of organic food products is quite limited and is estimated to be around Rs 700-800 crore only. This shows a great opportunity available for us as production-wise India is among the top organic producing countries.

What are the drivers for the growth of organic food market in India? Have the prices affected the demand of the product?
India has been witnessing a revolution of sorts. Health has come to the forefront for the higher income as well as middle income groups. Ayurveda, Swadeshi etc. are part of the lifestyle now. Disposable income is increasing and consumers are more open to spend on the preventive health care. On a high level, this has been driving the domestic organic market as well. However the vast gap between the organic and conventional products is a hindrance for the mass growth of the market. The domestic market of India is mostly price-driven; people usually go for inexpensive options based on the earning capacity. The government has been working to encourage farmers for organic farming but the governmental action plans have made little success in creating a market for organic produce because of the neglect of the consumers driving this segment. The industry along with the government should collectively work on the development plan with a holistic approach to educate consumers, create the market, and reduce taxes on organic products and create mass awareness for the same.

What are the challenges you are experiencing as an organic food manufacturer? Are there any issues on retail front?

The two main hindrances to the growth of organic produce industry in India are the lack of awareness about organic products and consumer trust. The whole organic industry is very new. There isn’t enough pull from the market and the absence of proper regulations has encouraged a lot of spurious brands to come and exploit the consumer trust. This has put the genuine brands like us at advantageous position. On the other hand, many of the retailers do not have much awareness about the importance of the genuine products and hence only go after the margins. This is the biggest challenge that we face where we have to fight against many of these unethical business practices. This greed for higher and higher margins is also restricting the growth of the industry.

What are the changes you expect from food regulator for organic food?
Government is the key player in facilitating organic food and products to common masses and developing the industry. Formulation and implementation of promotional policies and action plans for organic farming and organic produce industry is the need of the hour. Government plans need becomes more consumer-centric rather than just focussing on the farmer side. If there is a pull from the market, it will ultimately help the farmers. Public awareness campaign will add to the benefits of the organic produce industry.

Regulator has to play a very active role in building the trust among the consumers. Unfortunately so far the steps have been far from adequate. There are so many local producers and brands that are selling fake products under the garb of organic. As a manufacturer even today the guidelines are not clear. Major step awaited from the government is the enforcement of the sale of certified products and promotion of verified and tested organic produce only. Also, the uncertified products and fake organic products should be taken out of the market to earn consumers’ trust in organic produce. Some strict laws need to be implemented to pave the path for industry’s growth with genuine products only.
 
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